A Day in the Life:

I know that certain European countries believe that we in this country serve a pale imitation of what they call coffee.

But, I must say, often when I’m overseas, at least on the Continent, I feel that they must have learned how to make the drink by studying the WWI Baldrick Guide to Making Coffee. That is use mud, dandruff, spit and water from a puddle – and the less said about the chocolate sprinkles the better.

A saving grace, I suppose, is that they insist on serving said drink in a thimble so, no matter how bad it tastes, it won’t last long meaning that those locals who manage to linger in a cafe for hours over a single beverage must have honed their ‘lift-tip-but-don’t-drink’ technique to perfection.

Anyway, we’re nearly at the end of the week, just one last effort. On to the news:

The News:

PUB, RESTAURANT & DRINKS PRODUCER NEWS:

• HM Government sets out responses to pubs code consultation. Sets costs at £200 max for tenant & £2,000 for pub co.

• Pubs code: Max penalty is 1% of UK turnover of entire group. This would only be paid in circumstances of extreme misbehaviour

• Pubs code: Tenants can request MRO at rent review, even if rent does not rise.

• Pubs code: Significant investment, point at which MRO can be set aside, set at 200% of dry rent & set-aside is max of 7yrs

• Pubs code: Major price rises, those that can trigger MRO, set at 3% of beer, 6% for alcoholic drinks and 20% for other services

• Pubs code: HMG confirms that franchises are not encompassed within MRO.

• Enterprise yesterday bought back c97k of its own shares at between 101p and 103.5p per share

• Stock Spirits has announced that Marek Sypek will be joining the Company as MD, Poland with effect from June 2016. The group says ‘Marek has a proven track record in FMCG both in blue chip companies and in Private Equity backed businesses and joins us from Agros-Nova Holding, one of Poland’s largest producers of drinks, jams and preserved vegetable products, where he was CEO. He successfully turned around the business and led the delivery of significant profit growth.’ CEO Chris Heath comments ‘I am delighted to welcome such a talented leader to Stock and I am confident that Marek will prove to be a major asset for the Group as we return the business to growth. Having previously been the Chief Executive of Agros-Nova he has a widespread understanding of the food and drinks industry as well as the business environment in Poland.’

• AB InBev announces it has reached agreement on how to protect the public interest post the acquisition of SABMiller. It says ‘the package of commitments addresses employment, localisation of production and inputs used in the production of beer and cider, empowerment in the company, long-term commitments to South Africa and participation of small beer brewers in the local market.’

• AB InBev agrees to invest R1bn to support small-holder farmers in wake of SABMiller purchase. Will promote enterprise & local manufacturing. Minister of Economic Development Ebrahim Patel comments ‘South African Breweries – the SABMiller predecessor – has been an important company in the South African economy for many years. This transaction is by far the largest yet to be considered by the competition authorities and it is important that South Africans know that the takeover of a local iconic company will bring tangible benefits.’ CEO of AB InBev Carlos Brito comments ‘we are pleased to have reached this agreement with the South African Government. As we have stated from the outset, we are excited about the growth opportunities and the role South Africa will play in our combined business. Recognizing South African Breweries’ important contributions to South
Africa’s economy and society, our commitments seek to build on this deep heritage and we believe there is a huge amount that the two companies can achieve together to the benefit of all stakeholders.’

• Stock Spirits Q1 trading update. Total revenues rose by 29% to €55.3m, operating profits were €5.3m vs a loss of €4.2m last year.

• Stock Spirits points to recovery. CEO Chris Heath commented ‘the positive momentum we saw in the second half of last year has continued and we have seen a strong start to 2016, with volume, sales revenue and EBITDA growth. All markets have recorded EBITDA growth in the first quarter. Especially pleasing is a return to profit in the quarter in Poland following a loss in Q1 2015. There is still much to do but the initiatives we have been implementing since making the management changes in January last year and following the ‘root and branch’ review this year are clearly delivering results.’

• Stock Spirits CEO continues ‘it is still early days, but we are pleased with the start the new products we launched in 2015 have made and the recent medal awards for both our core brands, and several new products launched in 2015, continues to confirm the outstanding quality of our brands versus their competitive set.’ Mr Heath concludes ‘in addition to the strong trading performance, our net debt at the end of Quarter 1 has reduced to €43.6million, a reduction of €13.6million since the year end, further strengthening our balance sheet.’

• Amber Taverns like-for-like sales rose by 3% and EBITDA grew from £9.1m to £11m in the year to 31 January. The group also secured £25m of funding for further expansion of its 117-strong estate and has two new openings slated for this month, with a further 11 in the pipeline. Speaking to MCA, chairman Clive Preston said: ‘I think I’m right in saying we are now the largest purely wet-led pub company in the country. Everybody doubted it all those years ago but it has provided to be an incredibly durable model.’

• Hogs Back Brewery is launching London’s Outback Golden Pale Ale, a 4.5% ABV golden ale with a ‘drier, hoppier taste’, which has been listed by 114 M&B pubs. The beer will be sold in Mitchell & Butlers ‘Castle’ pubs, with further distribution to follow. Hogs Back managing director Rupert Thompson said: ‘London’s Outback offers the hoppiness that many craft beer drinkers look for, but with a lighter taste than traditional IPAs. This is a style where we’re seeing growing consumer demand and we’re confident Outback will quickly win listings and drinkers in both traditional pubs and newer craft beer bars.’

• The BBPA has welcomed news that the government is recommending pubs be allowed to stay open until 1am for the Queen’s 90th birthday. If approved, the extended trading hours would apply to Friday 10 and Saturday 11 June. The ALMR has also praised the move.

• AB InBev has entered into an agreement to acquire Virginia-based craft brewery Devils Backbone Brewing for an undisclosed sum. The brewery will join AB’s The High End unit, comprised of several craft and import brands, including Goose Island, Blue Point, Four Peaks, and Stella Artois. Devils Backbone Brewing Company co-founder and CEO Steve Crandall said: ‘While we are joining a creative group of craft breweries in the division, Devils Backbone will retain a high level of autonomy and continue its own authentic DNA within The High End framework.’

• The British Beer & Pub Association and McKinsey & Company have collaborated on ‘How Good’s Your Business Really?’, an online productivity tool for managers. HGYBR uses five short surveys to assess a business across key performance areas, and benchmarks the user against their competition. It has been developed as part of an initiative led by Sir Charlie Mayfield (Chairman of the John Lewis Partnership), with the support of the Government.

LEISURE TRAVEL:

• The US hotel industry reported mostly positive data for the week ending 9 April, although occupancy remained flat, according to STR data. Average daily rate for the week was up 3.9% to $122.90, and revenue per available room increased 3.9% to $83.83.

• Online platform Dayuse.com has claimed that UK hotels could reach 100% occupancy by providing guests with the opportunity to have a ‘daycation’ at their sites. The platform allows hotels to sell unoccupied rooms for the day at a discounted price.

FINANCE & MARKETS:

• MPC votes unanimously to hold rates in UK at 0.5% and to maintain level of QE at £375bn

• Bank says 12mth CPI inflation ‘increased to 0.5% in March but remains well below the 2% inflation target.’ It says ‘this shortfall is due predominantly to unusually large drags from energy and food prices, which are expected to fade over the next year.’ Bank adds ‘despite picking up, core inflation also remains subdued, a consequence of the past appreciation of sterling, weak global inflation and restrained domestic cost growth.’

• Bank says given risks to global economy, it will ‘set monetary policy to ensure that growth is sufficient to return inflation to the target in around two years and keep it there in the absence of further shocks.’

• China’s economy grew 6.7% year-on-year in Q1 of 2016, marking the slowest quarterly growth in seven years. The figure was in line with expectations, however.

• World markets: UK mixed yesterday, Europe up. US up in later trade but Far East down in Friday business hours

• Oil price up a little at a shade under $44 per barrel

• The Bank of England has warned the EU referendum could cause ‘some softening’ in growth in the first half of this year. ‘There are some signs that uncertainty relating to the EU referendum has begun to weigh on certain areas of activity, as some decisions, including on capital expenditure and commercial property transactions, are being postponed pending the outcome of the vote,’ policymakers said in their minutes of the meeting.

• Lloyds Banking Group has also cautioned that a UK vote to leave the EU would create ‘economic uncertainty’ although the long term impact remains unclear.